A new jobs report came out last week, saying the "number of Americans filing for jobless aid rose to an eight-month high, clouding the outlook for an economy that is struggling to gain speed."
Economists had expected unemployment claims to fall, but instead new claims rose 43,000 to 474,000, the highest since mid-August. Other reports, according to Reuters, showed weaker employment growth in the manufacturing and services sectors in April, while hiring by U.S. small businesses has almost ground to a halt.
So why should those of us who are retired care about the job picture?
For one thing, workers are consumers, and consumers support 70 percent of the economy. With fewer people working, the economy will never fully recover and our living standards will inevitably decline. With fewer workers paying taxes, states will never be able to close their budget gaps, and the federal government will sink further and further into debt.
Workers also pay Social Security and Medicare taxes. A smaller workforce means less money for seniors, less money to pay Medicare bills.
And here's the disturbing long-term trend. Since 2000 the U. S. population has increased by almost 30 million people. But as this graph shows, we have the same number of jobs -- actually not quite as many jobs. That means, compared to ten years ago, there are 30 million more Americans who are not working.
The government reports that the unemployment rate has inched down to around 9 percent, from a high of over 10 percent. But 9 percent is pretty bad. And the only way anyone can even get to 9 percent is by not counting the millions who have dropped out of the workforce -- people too discouraged to look for work, but who would gladly take a job if they could get one. The broader rate of unemployment, which includes people who work part-time but want a full-time job and people who have given up looking for work, is 16 percent, nearly double the official rate. (And you can count me, and several of my friends, in that 16 percent.)
To add insult to injury, we not only have fewer workers, they are making less money. Yet they have to support more people who are not working -- people on unemployment, people on Social Security, and people in their own households who may once have been working but no longer are -- or who may be expected to work (such as recent college graduates) but aren't.
The most recent report says that wages increased 1.9 percent in the last year. But inflation increased 2.7 percent. So even ignoring the unemployed, we are a little bit poorer than last year at this time.
One major problem is that middle-income jobs are disappearing from the economy. Many administrative and managerial jobs have been replaced by low-income jobs in retail, restaurants and tourism. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010, while low-income jobs have increased from 30 percent to 40 percent of total employment.
And while it's easy to blame our schools and our kids, the problem is not a lack of skills, but the structure of the job market. According to a recent study by the New America Foundation, some 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree. For example, 30 percent of flight attendants and 16 percent of telemarketers have bachelor’s degrees even though this credential is not necessary for these jobs.
And there's another reason why we should care. We're at the stage of life when we're supposed to cultivate our generative qualities. When we get to our 60s, our own ambitions and selfish concerns are supposed to take a backseat to those who are following us. We're supposed to extend our concerns into the future and care about the next generation, and the one after that. Don't we want our children to have the same, or better, opportunities than we had? Don't we want to pass on to our grandchildren a better world, one where they can live a decent life, and fulfill their dreams?
On Friday there was one mildly optimistic note. The American economy created 244,000 jobs last month, the third month in a row that it has seen more than 200,000 new jobs. After a precipitous three-year decline, private employers have been adding jobs for a little over one year. That's the right hand side of the graph up above. But as you can see, we have a long way to go. Experts say at the current pace of job creation, the economy won’t return to full employment until 2018.
So is it any surprise that Americans are losing faith in the economy, even in their society? What does the future of democracy hold for us if it cannot create jobs, produce higher incomes, and make our futures more secure?
Jobs. That's the missing ingredient in our economy. So I, for one, would encourage our president, the congress, our state governments -- and everybody else -- to think about that one missing word. Jobs. Because more jobs and better paying jobs are the key to solving our other economic problems, from the federal deficit to the funding (and fairness) of Social Security and Medicare.
Having a better job, or even having a choice of jobs, might also lift our spirits a little bit.